Friday, April 25, 2008

Book Advances

April 25, 2008

Before we get going on this lengthy post about book advances and, perhaps, royalties, I want you to ask yourself a question and I want you to be as honest with yourself as possible. (Yes, I know it's hard).

When you buy a lottery ticket, do you really expect to win?

I know you think you CAN win, but that's not the question. The question is, do you think you WILL win?

Okay, hold that thought for a while, we'll get back to it. And yes, there's a reason why I have a photo of Han Solo up.

A book advance, as I imagine most of you know, is money given to the author upon signing a book contract. It stands for "advance" against royalties, which is to say, if your publisher thinks your book will sell 1000 copies and you will get $1 per copy (these are made up numbers), then they expect they will eventually owe you $1000, so instead of waiting for that to happen, they give you $1000 up front.

So, ultimately, a book advance is supposed to be a reflection of the publisher's "best guess" of the number of copies they expect the book will sell. In reality, they'd be thrilled if it sold many, many more, and they in most cases don't seem to actually expect it to sell more than 65% or 75% of their estimate. (Then why overestimate, you ask? Beats the hell out of me. It's a "best guess." There are many things publishers do that make little or no sense and this is one of them. They seem to set low expectations and then do everything they can to meet them.)

Except there are clearly exceptions, particularly at the higher end of the scale, the Stephen Kings and John Grishams and Dan Browns, where they may be given a couple million dollar advance that has little or no correlation to actual copies sold. The publishers just know they're moving books and a lot of them and that in order to get those authors on board, they're going to have to throw some money at them to entice them to come there and stay there.

There may be other issues involved besides number of copies sold. Presence on a bestseller list can have its own sales impetus as well as cachet, and so do awards and movie deals and foreign rights. Authors who don't make the bestseller list regularly but whose books are regularly made into films are going to be thought of differently by a publisher.

Now, I was ambivalent about coming right out and talking about this, but at this point in my so-called fiction writing career, I figure it's time to lay down my cards.

My first book was essentially self-published. That is, CATFISH GURU, put out by iUniverse. It's a long story, but it was through a deal iUniverse briefly had with Mystery Writers of America, so it cost me absolutely nothing to have it done, so I did. Therefore, every sale was profit.

DIRTY DEEDS, which was published by a small press, High Country Publishers (now Ingalls Publishing Group, I believe) paid me an advance of: $0.

THE DEVIL'S PITCHFORK, published by Midnight Ink, paid me an advance of $1500. (They originally offered $1000.)

THE SERPENT'S KISS, published by Midnight Ink, also paid me an advance of $1500.

Both of those books have been published, I received a royalty statement yesterday, and although it looks as if Pitchfork's not really selling, Serpent continues to, albeit slowly. Both of these books also sold French, Slovak and German translation rights. If any of those books are available yet, I'm not aware of it, not having received my copies. There has been some interest on the part of movie producers, although that doesn't seem to be active anymore.

Midnight Ink also contracted with me to write two more novels featuring Derek Stillwater. Those were:

ANGELS FALLING, an advance of $3000. ($1000 on signing, $1000 on turning in the first 100 pages, and $1000 upon completion of the manuscript).

THE VALLEY OF SHADOWS, an advance of $3000, same payment schedule.

For a number of reasons, not all of which make sense, but which ultimately comes down to the fact that MI was disappointed in sales on the first two books, Midnight Ink canceled my contracts. I had completed the manuscripts to Angels and Shadows, and they paid off the full advances. They also paid off the foreign rights monies on the first two books. They released the rights to the last two books, but refuse (to-date, and I have very little hope of this happening) to release the rights to the first two. The contract allows for their rights release something like two years after they're declared out of print, but neither of them have been declared OOP yet, and as I mentioned earlier, SERPENT is still selling.

For the record: from what I have been able to ascertain from other writers with Midnight Ink, these advances are typical for this particular imprint of this particular publishing house (Llewellyn Worldwide).

That is to say, they suck.

Or do they?

More honesty: when I was in college, I picked up a collection of essays about Stephen King. There was an intro by King ("The Making of a Brand Name" or something similar) and in it he mentioned that he had received (in 1972) an advance of $2500 for the hardcopy rights to CARRIE. (Yes, compare that to my paperback advance 30+ years later). He later received an advance for the mass market paperback rights to CARRIE for $400,000. (At that time, part of his hardcover contract required a 50/50 split on paperback rights, so King ended up getting $200,000 from NAL and Doubleday received $200,000. To say that I was inspired by these numbers was an understatement. I tried my hand at writing. It turned out I loved it. I kept expecting to break in and get big freaking advances, $200,000 or $400,000... and then later, $100,000... and then $50,000... and then $20,000... maybe $10,000 ... okay, how about $5,000...

A number of writers have done polls on their blogs to get an idea of what the "average" advance is. Tobias Buckell's was fairly recent. He had about 108 authors participate, mostly in the arena of SF and fantasy. For first novels he found the range of advances was $0 to $40,000 with a median of $5000. Because some of those advances took place as far back as 1970, he adjusted the number for inflation to $6000.

Tobias further asked authors who had been around for a while what their advances were like. In other words, multiply-published novels. Those advances ranged from $0 to $600,000. Here's the thing though, as enticing as that $600,000 number sounds. The median for this group was: $12,500. (I hope you like Alpo, because that's probably what you'll be eating if you hope to make a living on that).

Author Justine Larbalestier also did a similar survey. She's Australian, I believe, but had participants from Australia, the UK and the US. The important thing here is that the average book advance was: $5,920.

Romance author Karen Fox has also done surveys, although hers are broken down by romance publisher and doesn't seem to have averaged them all out. Nonetheless, the range for an advance for a first novel is from $0 to $15,000.

Now, let it be said, I'm currently making a living as a freelance writer. I've received advances of around $10,000 for my nonfiction work. I write market research reports as part of that. This sort of number crunching is what I do, by and large. So although I might have some questions about the validity of the way these studies are self-selected, the size of the group reporting, and a number of other biases, what I find most interesting and perhaps most valid about them, is how they all seem to say the same thing.

The typical advance (or average or median) for a first novel is going to be around $5000 or so.

[And I've done this before, but let's break it down for you. Let's say you're really lucky and you get a $100,000 advance. Whoo-wee, congrats. You're rolling in it. Or are you? Your agent got 15%. So now you get $85,000. Then the government gets their cut. In Michigan I pay 24% for federal tax and 4% in state. Your mileage may vary. Now, keeping in mind that you're taxing the $85,000, not the $100,000, what you have in your pocket after your agent's commission and taxes is $61,200. A nice chunk of change, but you're not rich. And as I mentioned earlier, publishers tend to break this up a bit. It used to be half on signing, half on turning in the completed manuscript (post-edits) plus whatever time your publisher's accounting department hangs onto it and whatever time your agent hangs onto it and hopefully it doesn't get lost in the mail.... Publishers are increasingly breaking it up into three chunks similar to the way mine were, or worse, that last third on publication! The point being, it's not a terribly dependable way to make a living unless your advances are huge. And the assumption is your publisher will publish your book every 12 months on the dot and the money will arrive on a regular schedule, but pub schedules vary all over the place, from 9 months to 12 months to 14 or 15 or 18 months--or never--and probably the less said about publishers' accounting departments' reliability the better.]

So, my advice to aspiring writers concerning book advances: adjust your expectations downward. As I said at the beginning, do you buy a lottery ticket expecting to win? Or knowing you might? Because publishing is a lot like that.

Which brings me to Han Solo up there. You may have just read everything I wrote and be thinking, "I really didn't want to hear that." Or, perhaps, "Mark's such a loser, look how little money he made. That'll never happen to me." Or, perhaps, any number of variations on that theme.

That's fine. As Han Solo said in THE EMPIRE STRIKES BACK: "Never tell me the odds."

You MIGHT, as a matter of fact, be the writer that gets the $1,000,000 advance. Could happen. Probably won't. But could. Maybe. If you're good and more than a little lucky. And let me assure you, and maybe you disagree, but a first novel that receives a $1,000,000 has almost nothing to do with talent and almost everything to do with luck. That writer was in the right place at the right time with the right book.

I wanted to provide one more link. There's a publication called Publishers Lunch that announces all sorts of book deals. They have a rating system where it says "Nice Deal" which is something like $1-$49,999 and "Good Deal" which is something like $50,000-$99,999 and also has "Significant Deal" and "Great Deal" and I think, "Excellent Deal."

Author John Scalzi has a hilarious and I think, true post about this on his blog, as well as comments from a small press publisher taking him to task for suggesting that these low-end deals suck. Very much worth reading.

130 Comments:

You know, I think this was really honest and accurate . . . I make a living predominantly from writing fiction. The way I look at it, I would rather make my own stories up and earn money than write about something I don't care about. SO it's a living, and if I HAPPEN to at some point win the lottery, then great.

Erica,Thanks. I'm inclined to waffle and say, "from my point of view" or "in my experience" but from talking to more and more and more writers, yes, there are some that make it big, there are some that make enough to live on, and by that I mean their income from writing novels (often more than one a year, as you can attest) probably ranges in the $50,000 to $100,000/year range, and then there is this vast gulf of novelists who are lucky to break $10,000 a year on a really good year.

One of the thoughts I had was: by most standards, that means the majority of novelists are "hobbyists" or "amateurs" and that makes novel publishing a very, very odd business enterprise.

But perhaps most aspiring writers would prefer to believe they will hit it big. Why not? It motivated me for years. Still does, to some extent. If you can't fool yourself, who can you fool?

Publishing is a weird business. Actually, from the point of view of most writers, given the sums of money involved, publishing isn't really a business at all, more like a hobby that pays for itself. (Who...I wrote this off-line before seeing your similar comment)

Poisoned Pen Press gives small advances. By the time the hard cover editions sell out, over the course of a few years, we end up with a lot more than the original advance (with "a lot" defined as multiple times the advance, not in absolute terms!)

This system is fine with me. My theory is that unless an advance is large enough for you to live on while writing the next book (and hence gives you the option, should you care to take it, of writing full-time, at least for a year) what difference does it make if you get the money up front? If you aren't living off the fiction, but by means of your real job, then presumably you don't need the money up front. Of course, you might receive more money than the book ultimately earns. But that's not going to happen often and is nothing to be happy about. Granted, some writers might want the advance to spend on promotion.

Eric,Promotion more than ate up my minuscule advances. I think Scalzi's take on this was hilarious, but pretty accurate, though. And he talks in his response to the small-press editor about his take on the "get money later from royalties thing" which I essentially agree with, although I don't agree with him 100%, because there's some truth to what you say, as well.

I need to make more money than I do now. Cost of living has doubled in everything but my rent and my income. And my older body needs more health care than it did when i was young. I can't raise rates on my students enough to make a difference. Financially, I'm in a weird sort of "stuck" place. If I take a "day job," then I lose my writing income, and I'll be working more and earning less.

That only leaves writing.

I'm fully aware that looking to fiction to increase my income is not the wisest path towards financial security, but it's the only option I can see. Every other option means developing new skills and losing money I don't have and time I can't afford.

I made my choices young. I got older and time passed, and now the only skills I have are music and words. If I saw another option, I'd probably do it. I'm a scaredy-cat and a security-freak.

But you ask if I think I will win? Well, yes. You do what you have to do. It's not some cocky belief in my skills. I will find a way to make it work, whether it's real name or pseudonym, or if I get some brilliant money-making music idea. I don't have a choice.

When you're backed into a corner, it's easy to decide to fight, to believe in one's survival. It's easier, I guess, when it's not a choice.

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